Public Angry

The recent 30 percent increase in petroleum products has triggered a lot of public criticisms and anger from a cross-section of the public. Many of those condemning the Mills government over the price hike recall how the then opposition National Democratic Congress (NDC) he led, politicized the issue of petroleum products pricing. The NDC slammed the then New Patriotic Party (NPP) administration, claiming it was insensitive to the plight of Ghanaians and went ahead to organize a series of demonstrations to register their displeasure about the manner in which the NPP was managing the affairs of the country. Many ordinary Ghanaians could not understand why President Mills, who promised during the 2008 electioneering campaign to reduce fuel prices drastically, is now doing the contrary. “Why is the NDC government full of lies? The National Petroleum Authority boss was interviewed about this price increases and he categorically denied it, only to come out and slap 25 to 30 percent increment. Ghanaians are watching,” Francis Twum, a resident of Accra lamented. Contributing, Evelyn Mensah, a civil servant stated: “The government last year promised to hedge the price of the commodity so that if the price goes up we will still get it at a lower price. Where is the promise? This is robbing Peter to pay Paul. Ghanaians must reject the new price! “The NPA has done a disservice to this country, at a time when businesses that fund the nation's coffers are struggling. The NPA has chosen to serve the parochial interests of a few and they will surely have to give account of their stewardship,” she added. A student of the University of Ghana, John Tei, on his part said: “Mills promised 2011 will be the year of action. Kufuor bought a barrel of crude oil for $147 per barrel and the highest Ghanaians paid for a gallon of petrol was GH¢5.30. Now that the price is at $92, the NDC government is selling a gallon of petrol at more than GH¢6.00. This is the action he (Mills) is talking about; an action that will send most Ghanaians to their graves. “Last year, the same government told Ghanaians that it had agreed to hedge oil to prevent the nation from buying oil at higher prices when the price of the most important commodity rises on the world market. So the question we are asking is; why the increment?” Mr Tei asked. Some traders in the Accra Metropolis have also registered their displeasure about the current hikes in petroleum prices which took effect from yesterday January 4, 2011. According to the traders, patronage of goods and services on the market had already fallen to an all-time low, noting that the price hike would make it very difficult to make ends meet. The traders, who were mostly market women, told DAILY GUIDE that the increment in petroleum prices would definitely affect the prices of goods and services. “The 30 percent increase in petroleum products which translates into 18 percent increase in transport fares would make life unbearable for us,” Mrs. Faustina Ansah Boamah, a trader at the Hawkers Market at Circle noted. Meanwhile, the Association of Ghana Industries (AGI) has expressed its fury at the latest petroleum prices hikes, dreading that it might kill the businesses of some of its members. According to the president of the association, Nana Owusu Afari, last year’s price increment in electricity tariffs nearly collapsed some businesses of its members. Following the announcement of the price hikes, he is apprehensive, telling Citi Business the move might make doing business in Ghana almost impossible and reduce the country’s attraction as an investment destination. “We have already been complaining about the cost of doing business in this country. Now this increase is going to take a lot of money, and when that happens? The people’s ability to purchase goods are reduced and this will have a very sad effect on industry because when you produce the goods and you cannot sell, you have to cut down production and lay off workers. “Secondly, industry will also become uncompetitive in the ECOWAS region. We are in a global economy, so a lot of people who want to make their profits may be looking to re-locate somewhere. “These are things that we have always been talking to the government about. We did not expect the quantum of the percentage (increase) that we are having to handle. It’s too much on the high side and industry will suffer." Transport fares have gone up by 18 percent, beginning yesterday. The increase follows late Monday evening announcement by the National Petroleum Authority of a 30- percent adjustment of prices of petrol, diesel, and LPG. Petrol will now sell at GHp 152.07 from GHp116.98 per litre, with diesel going for GHp153.46 from GHp118.05 per litre. LPG will now sell at 104.76 from 83.81 per kilogram. Kerosene and pre-mix fuel are not affected by the price increases. Government blamed the price hike on increases in crude oil prices on the international market as well as increases in Tema Oil Refinery debt recovery levy approved by Parliament. Petroleum price increases often lead to nasty clashes and disagreements between commuters and transport owners. To forestall such quarrels, Chairman of the Ghana Road Transport Coordinating Council, Mathew Hayford, said the council had already met and approved an 18 percent increase. He explained that the increase in fuel prices accounted for eight percent increase in the fares, with increases in insurance levies and prices of lubricants accounting for the remaining 10 percent. Mr Hayford said taxi fares would however be calculated differently. The international community recently warned that Ghana’s decision to hedge a barrel of oil for the next 6 to 12 months could have dire consequences on the fragile economy but the government ignored the warning and went ahead to hedge the commodity.